As a result of the US support package related to the corona virus and a drop in crude oil inventories, the oil price has risen. The price of Brent oil rose 0,7%, while West Texas Intermediate is paid 0,6% more. Analysts also expect that the demand for fossil fuels will continue to decline in the coming years.
A weaker US dollar, the coronavirus financial support package and lower oil inventories have caused Brent crude prices to rise $0,35 to $51,44 per barrel. It's up 0,7% from the start of the week. WTI oil prices rose $0,30 to $48,30 per barrel, an increase of 0,6%. Figures from API show that crude oil inventories fell by 4,8 million barrels last week to 492,9 million barrels.
This had a major impact on oil prices, as many analysts earlier that week expected a decrease of approximately 2,6 million barrels. OPEC has already announced that it will increase production by 500.000 barrels per day from January. What also plays a role is the fact that Asian shares reached a record high last week. This is because investors expect a strong economic recovery next year.
What to expect?
Oil prices could move higher again next year as vaccination programs get underway around the world, according to several analysts. The restrictions that currently apply in many countries can then be phased out again. Yet there are also uncertainties. An example of this is the new variant of the coronavirus in the United Kingdom. As a result, many countries have imposed additional travel restrictions. It has a depressing effect on prices.
In addition, analysts predict that the demand for fossil fuels will continue to decline in the coming years. More and more countries are trying to limit emissions in order to comply with, for example, the Paris Climate Agreement. Several major oil companies expect global oil demand to peak in 2019.